Pension Reform Proposal Angers City Firefighters

Should city firefighters and lifeguards receive the same retirement benefits as police officers? That will be one of the major questions in the battle over pension reform in San Diego. We speak to the president of the firefighters union and Councilman Kevin Faulconer about a proposal to move all new city employees, except for police officers, to a 401 (k) retirement plan.

Guests

Frank DeClercq, president of San Diego City Firefighters Union Local 145

Kevin Faulconer, San Diego City Councilman representing District 2

Read Transcript

CAVANAUGH: Reaction is starting to come in on the pension reform plan proposed by San Diego mayor, Jerry Sanders, and to City Council members of the new idea is to eliminate guaranteed pensions for all future city workers except Moors. Instead, those workers would be offered 401K plans and be eligible for Social Security. One of the people not happy about this idea, which may end up on the ballot in 2010, is my guest, DeClercq, president of San Diego City firefighters union 145. And good morning, frank, thanks for speaking with us today.

DECLERCQ: Good morning, thanks for having me on.

CAVANAUGH: Now, the first proposed pension reform ballot measure would have preserved pension guaranteed [CHECK] benefits for firefighters and life guards. Did this new version come to you as a surprise.

DECLERCQ: Oh, absolutely it did. While we knew there was -- we were told by the mayor and by council member Faulkner, there were absolutely going to be two ballot initiative, and as you know, they held a press conference down by the bay [CHECK] they allowed, I believe, the same people that got us into this mess, the San Diego County taxpayers' group, the Lincoln group, about 15 Republicans that are all business people, moved them and leveraged them into a point to just taking this initiative that Mr. DeMaio and Mr. Faulkner are obviously both running for mayor. But they leveraged them and knot them to move us into their -- and we believe it's a huge mistake. It is nothing more than politics, it's not going to save the city any money.

CAVANAUGH: Well, let me start you one by one on what it is you don't like about this plan. Is it going -- I keep hearing the argument that it's going to affect the city's ability to retain firefighters and in the recruit them. Why would that be? What is the argument that you have for that?

DECLERCQ: Well, the argument I would have for this is right now, in their own scales, our pay scales are some of the lowest in the state, and those are studies that were done by the mayor, and done through buck consultants, those surveys show us at the bottom. We've never had a problem recruiting firefighters, even in a tough economy, people -- any place that has jobs available, people are gonna apply. And the question for us is gonna be retaining those people. It costs about a hundred and $27,000 per year in the first year to train one firefighter. If those firefighters that get recruited and get hired on and go through these training academies, I can assure you, they're not gonna stay here in San Diego. We'll become the biggest training ground, they'll all go north to where they're better paid and better benefited. And we won't be able to keep quality people here in San Diego. And that's important. When someone calls 91 work and you're entering a person's home, you have to have people that are top quality people, that are background checked, and that know these areas and these ace [CHECK] and that's what you have today, you have career firefighters issue not a transient force like they want to have in the private sector, and hence that's why they're moving into these 401Ks.

CAVANAUGH: Let me ask you something, frank, at what age can firefighters [CHECK].

DECLERCQ: Right now, the earliest age that they could retire, they'd be 20 years of service, and they'd have to be age 50. But we've actually been negotiating, and we had an agreement before we just did this, we just in fact sign aid tentative agreement about 15 minutes ago, and knot our members to ratify, and they were taking the firefighters thee, they could get 50 percent at 55, [CHECK] but the mayor in this ballot initiative, also, before they got this done, they already moved us to 80 percent.

CAVANAUGH: Now, do you feel as if you have been not consulted the way you should have been before this second announcement was made that basically said firefighters and life guards are not included anymore this guaranteed pension idea.

DECLERCQ: Oh, absolutely we were not consulted at all. I received a phone call from the mayor on Monday at 5:00 o'clock, and this is, you know, well over two weeks after we were assured by counsel member Faulkner and the mayor, and as I said in subsequent interviews that wield would not be put into there. But we believe this is all again, this stems from wall street, wall street bankers, they want to [CHECK] because wall street wants their hands on this money. And they'd love to take over these pension systems, and again, the systems are solvent, they're solid, but they want the money, and this is another way of them putting everyone into a 401K, so that people, working people can pay three times the fees on the retirement accounts that they normally pay in one of these government pensions.

CAVANAUGH: Now, frank as I said, you're president of city firefighters' union local 145, you speak with rank and file members of the firefighters' union here in San Diego. I'm wondering issue they must hear from their friends and neighbors, you know, this feeling against city worker pensions and everybody should have the same benefits as workers in the private sector. How do they respond to that?

DECLERCQ: Well, you know, how they respond to that is we understand that there has to be pension reform, and we, as firefighters, we've got -- I could share with you a couple of sheets of a full list of reforms that we've given, and we continue to give. You know, we're all about reforming our pensions, no one is not willing to not do that. But what they're proposing here is putting people that risk their life into a 401K plan, this plan that they have is so -- there's nothing definitive in he. They talk about 11 percent that they might pay. But you know, when you add the 11 percent that they might pay, and incidentally, we've never been in Social Security. So they don't even address that, than they might put you in Social Security. We'd be lower benefited than they are in the private sector. They have to add 11 percent that they -- and in addition, they have to pay for disability insurance at 3.5 percent. They'll be right back. This isn't gonna save the city a penny. They'll be right back to the 14 and a half percent they're paying today, they're gonna have 62-year-old, potentially 62-year-old, to 65-year-old firefighters on the front line, they haven't even waited to see what's that gonna do to the workman's comp cost. There are so many different things. And you know what's tough for me? What do I say to the families of the 36 firefighters in San Diego that have given their lives in the past years, that died early, died in the line of duty, and the hundred and 36 this we put on a memorial wall in Colorado Springs this past year? It's a similar number every year, and you know, like I said earlier, this same group of 15 business people that you saw at this press conference, these are the same people, you know, it's the taxpayers issue the Lincoln club, that continue to profit off this city. You got business fees that are on average $79, where in Los Angeles and San Francisco, they're 151800. This is what really all about. It's not saving the city any money. The employees have given well over a hundred million dollars in concessions. There's no death and disability benefit. With 3401Ks. Although they're right, they might provide one.

CAVANAUGH: Frank, I do gotta stop you. I'm sorry, I think you've really talked about your point very well though. DeClercq, thank you for speaking with us today.

DECLERCQ: Okay. Thank you for having me.

CAVANAUGH: Frank DeClercq, president of San Diego city firefighters union 145. With us now is one of the architects of the proposed city pension reform ballot measure, Kevin Faulconer, San Diego City councilman. And councilman Faulkner, you heard what Frank DeClercq had to say. How would you respond?

FAULCONER: Maureen, good morning. My response is, we have to control our spiralling pension costs. And if you talk to any San Diegan, they've seen [CHECK] pension costs, some years ago was a hundred and is $60 million, this year it was over $200 million, and left unchecked, Maureen, these pension costs could spiral up to $500 million throughout the year. This is all about insuring that we do have pension reform, that we do have comprehensive pension reform, so that we can get these dollars back into our neighborhoods. We can spend it on [CHECK] where San Diegans want their money to go, and I think San Diegans were very clear last November when there was a sales tax increase on the ballot, Proposition D, and voters overwhelmingly rejected that. They said city hall, get your costs under troll, and in particular, they said get these pension costs reigned in and under control.

CAVANAUGH: Councilman Faulkner, I'm wondering in the original proposal that you came out with, with Miss, all public safety workers, police, fire, life guards were not involved in the idea of eliminating guaranteed pensions. They would still quiet a traditional pension, now with this compromised proposal, the firefighters and life guards are out. What is the rationale?

FAULCONER: That is right, Maureen. It was a compromised proposal, and what it set to do was insure that we had the most dollars saved and the [CHECK] fire and life guards was that it was in this measure that it was written in that the city must provide disability and death benefit, and on the police side, those check benefits are capped at 80 percent. So you have [CHECK] with all organizations, and as you probably know, as you switch to 401K for our city's employees, we are going to save tremendous amounts of dollars, and our estimators, Maureen, are in the first five years alone, we will save several hundred million dollars, and that is money that we will be able to put directly back into our neighborhood services and I don't need to tell the listeners what they've seen the city has not been able to provide and fund over these last couple of years. You take a look at the condition of our streets of that is what this is all about. It's about insuring that the mistakes of the past with the City of San Diego, got in so much trouble by deliberately under funding pension, granting increased benefits with no funding source, put us in the position that we're in now. And from my standpoint, somebody who has been on the council now for five years, as chairman of the city a audit committee, I know that this pension reform is absolutely essential for us to finally put our city back on strong financial footing, and to provide services in the neighborhoods that taxpayers deserve and expect.

CAVANAUGH: When the first pension plan was announced with mayor Sanders issue one of the reasons offered to keep firefighters, and life guards, on a traditional pension was that they were risking their lives just like police officers for the City of San Diego, and therefore the City of San Diego wanted to meet that with, you know, to stay basically thank you for doing that. And offering a guaranteed pension. So what changed?

FAULCONER: Well, and I think as the mayor made it clear that you look at the issues that we had, particular he in the police department, where we have had recruitment and retention issue, and our public safety individuals, men, and women, do risk their lives, and that's why it was so important, as I said before, to me, in this reform measure that it including the benefits in terms of death and disability benefits to guarantee these people who go above and beyond the line of duty, are taken care of. And it's also important that they have pension -- excuse me, a 401K plan that provides them with a retirement benefit. And also, under this plan, our public safety officers are not precluded from having salary increases in the future. So what it tries to do is it tries to take a look at how can we control our costs now, but at the same time looking forwards the future, insure that we're having more money for neighborhood services, while at the same time providing fire retirement benefits for our employees who do a very, very good job for our city every day.

CAVANAUGH: Councilman Faulkner, now that there is this compromise, this sort of stream lined one ballot measure proposal, what are the next steps in the process?

FAULCONER: Maureen, we'll be out gathering signatures, out in the next several months, and I think it's important to remember that the voters are gonna have the final say on this initiative. It is our anticipation that we will have this on the June 2010 ballot, and San Diegans will have a pretty clear choice. They can vote to pass this measure and the reforms and the savings that it brings or they can choose not to. And ultimately that decision will be up to the voters and I think that voters in San Diego have proven time ask time again that they're up for the task to help make these decisions and help choose the type of future that they want their city government. I'm betting that voters will support fiscal reform, they will voter for us to end the pension crisis, once and for all, and insure that we're focusing neighborhood dollars on vital city services that we need.

CAVANAUGH: Thank you, counsel man Faulkner.

FAULCONER: Maureen, thank you.

CAVANAUGH: I've been speaking with Kevin Faulconer, San Diego City Council man, representing district two, earlier I spoke with frank DeClercq, San Diego City firefighters union, local 145.